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There were 27 EMS transactions recorded in 2015, down from 33 recorded in 2014. EMS Consolidations were the most common type of transaction with 12 transactions in 2015, or 44% of total activity, compared to 17 transactions in 2014 which represented 52% of activity last year.
In 2015, there were 11 Vertical/Horizontal Convergences, up from the ten recorded in 2014. This year’s activity represented 41% of the total, compared to 30% last year. Private equity investments decreased in 2015, with two total transactions, or 7% of the total, as compared to six transactions in 2014 or 18% of last year’s total activity. There was one EMS divestiture, representing 4% of total activity, and zero OEM divestitures in 2015. Both categories recorded zero transactions in 2014.
There was one transaction categorized as diversification into EMS in 2015, representing approximately 4% of total activity, compared to zero transactions in 2014.
In terms of geography, 12 of the transactions completed in 2015 occurred in North America. This represented 44% of total transaction activity in 2015. The next largest geography in terms of transaction volume was Europe, with 11 transactions in 2015, representing 41% of total activity. Two transactions occurred between different high-cost countries (7% of the total). The final two transactions were split amongst other geographies with one occurring in Asia (4%) and one between a high-cost region and a low-cost region (4%). No transactions occurred in South America.
In terms of transaction size, Small Tier EMS providers accounted for a majority of the 2015 transaction volume with 14 acquisitions, or approximately 52% of total activity. Large Tier EMS providers accounted for seven acquisitions, representing approximately 26% of total activity. This level of activity from the Large Tier represents a significant increase compared to recent periods as this group recorded zero transactions in 2014. Six acquisitions by Mid-Tier EMS providers occurred during the year, representing approximately 22% of the total.